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Laborers sit under a billboard displaying a photo of Imran Khan during a July 22 campaign rally in Karachi, Pakistan. (Akhtar Soomro/Reuters) (AKHTAR SOOMRO/Reuters)

Pakistan has second thoughts on Chinese investment. It probably won’t be the last country to get cold feet.

It’s the mega-project at the heart of Chinese President Xi Jinping’s foreign-policy showpiece.

It’s the jobs-creating lifeline that would help keep Pakistan’s economy from sliding into the abyss.

It’s the $62 billion symbol of China and Pakistan’s commitment to a long-standing alliance that’s been described by past leaders as “higher than the Himalayas, deeper than the oceans, sweeter than honey.”

That, for years, has been the consistent message coming out of Islamabad: The China-Pakistan Economic Corridor — a massive slate of Chinese investments in Pakistan that includes an expansion of an Indian Ocean port, new highways and power plants — is too big, too important, too politically significant to fail for Pakistan.

But no more.

A top adviser to newly elected Prime Minister Imran Khan said this week that Pakistan should rethink investments from China, raising the possibility of a U-turn that would be a major setback for Beijing’s ambitious Belt and Road Initiative.

“The previous government did a bad job negotiating with China on CPEC — they didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot,” cabinet minister Abdul Razak Dawood told the Financial Times in an interview that immediately generated heated debate and criticism from opposition leaders.

CPEC, a port and transportation corridor that would connect far western China with the Indian Ocean via Kashmir’s lofty mountain passes, is seen as the crown jewel of China’s Belt and Road Initiative — a $1 trillion, 21st-century version of the Marshall Plan to build infrastructure, win friends and gain influence across the Eurasian continent. A major rethink by Islamabad could lead to deals being downsized by billions of dollars — and cause an incalculable loss of face for Beijing — at a time when the BRI is already losing momentum.

A day after the report emerged, Dawood’s Ministry of Commerce and Textile issued a statement saying his remarks were taken out of context. “Pakistan-China relations are impregnable and the government’s commitment to the CPEC is unwavering,” the ministry said.

But Pakistan isn’t the only country getting cold feet. In the year since Xi held a major summit in Beijing to celebrate his plan, countries that initially signed on are voicing fears about taking on too much Chinese-financed debt.

In December, Sri Lanka handed over an entire port to China after it couldn’t make debt payments. Allegations of corruption and recriminations ensued.

In July, Malaysia’s new leader suspended a $20 billion, China-backed rail development while warning about the specter of Chinese “neocolonialism.” In August, Myanmar, also known as Burma, reportedly sharply downsized plans for a $9 billion port. Nepal has discussed scrapping two Chinese-built dams.

Pakistan itself is already struggling to make payments on CPEC projects and could soon approach the International Monetary Fund for a bailout. Chinese Foreign Minister Wang Yi sought to assuage those concerns, pledging during a visit to Islamabad on Saturday that the projects will not add to Pakistan’s debt burden.

For his part, Khan, a former cricket star and a fiery populist, has not directly voiced opposition to CPEC. On Twitter, Khan has hailed the China model as a growth blueprint for Pakistan, and his advisers have said that any criticism of CPEC on the campaign trail is mostly just that: political stagecraft employed to undermine his rivals from the Pakistan Muslim League-N, who are seen as cozy with China. Citing other unnamed Pakistani officials, the Financial Times reported that Khan’s government preferred to spread out CPEC’s loans and projects over a longer time frame rather than cancel the deals outright.

As my colleague Ishaan Tharoor wrote last month, Khan’s hands may be tied by his domestic debt crisis anyway. Secretary of State Mike Pompeo warned the IMF this summer against bailing out Pakistan, and the Trump administration recently cut hundreds of millions of dollars in aid, reaffirming for many in Pakistan that only China stands as its one, true, all-weather ally.

But if even Pakistan, China’s “Iron Brother,” is now voicing doubts about its deals, then it’s a good bet that other governments will be rethinking the benefits, and pitfalls, of Beijing’s largesse.

Source: washingtonpost.com

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